The cost of adapting to climate change: evidence from the US residential sector

Using household-level data from the American Housing Survey, this paper assesses the cost of adapting housing to temperature increases. The authors account for both energy use adjustments and capital adjustments through investments in weatherization and heating and cooling equipment.

The authors’ best estimate of the present discounted value of the cost for adapting to the A2 ‘business-as-usual’ climate scenario by the end of the century is US$5,600 per housing unit, including both energy and investment costs. A more intense use of air conditioners will be compensated for by a reduction in heating need, leading to a shift from gas to electricity consumption.